CLARIFICATION REGARDING SCHEDULE AL - ASSETS & LIABILITIES IN INCOME TAX RETURN FORM
Reply: SCHEDULE AL- ASSET AND LIABILITIES
The government, after the abolition of wealth tax, introduced Schedule AL in ITR to ensure that there is no tax evasion by high net worth individuals and other entities as there have been many instances previously wherein it was found that the assets of a taxpayer are not in line with the income earned by him. To keep a check on the assets acquired and the income earned, the tax department has mandated that all assets and their corresponding liabilities be disclosed in the income tax return if taxpayers earn more than INR 50 lacs from any source.
Schedule AL is a part of ITR, which requires disclosure of all assets and liabilities held by a taxpayer at the end of every financial year and is applicable irrespective of residential status to all all individuals and HUFs if the taxable income exceeds Rs.50,00,000, means if the net taxable income after claiming deduction and exemption exceeds Rs 50 lakh then filing details in schedule AL is required.
Schedule AL enables a taxpayer to disclose assets and the corresponding liabilities in the ITR filed by the taxpayer. The values of the assets and liabilities standing at the end of the year are required to be disclosed in the schedule AL. The assets to be disclosed include immovable property, movable property and financial assets owned by the taxpayer. The liabilities include all liabilities of the taxpayer in relation to such assets.
The assets to be disclosed in Schedule AL will not include any personal effects other than those specifically asked for. Personal effects means movable property (including furniture, wearing apparel) held for personal use by the taxpayer or any family member dependent on him. The assets to be reported will include the following:While filing Schedule AL, keep the following in your mind:
Assets
The term `assets` include land; building along with immovable assets; financial assets such as shares, securities, and deposits; loans and advances; insurance policies; cash in hand; jewellery; vehicles; movable assets such as yachts, aircraft, and boats; and bullion.
Immovable property
Regarding land & building:
The details of land and building owned by the assessee whether singly or jointly should be furnished . The details to be reported are: - the description of the property, - address of the property with PIN code of the area where the property is located and - its cost. the details of all immovable property acquired through gifts or as inheritance are also to be furnished .
Financial assets viz. bank deposits, shares and securities, insurance policies, loans and advances given, cash in hand. Bank deposits include fixed deposits, recurring deposits and saving/current account balances. -
Movable property Various assets such as jewellery, bullion, vehicles, yachts, boats, aircraft etc., are required to be disclosed under movable properties.You must also disclose the details of the vehicles, yachts, boats, aircraft etc., which are no longer in use and also have not yet been discarded or have been retained and maintained as antique collections.
Jewellery here includes-
(a) Ornaments made of platinum, gold, silver, or other precious metal or an alloy comprising of such precious metals, whether containing any precious or semi-precious stone or not, and whether it is sewn or worked into any wearing apparel or not;
(b) Precious or semi-precious stones, worked or sewn into any wearing apparel, whether or not set in any furniture, utensil or other article. -
Interest held in the assets of a firm or an association of persons (AOP) If the assessee is a partner of a firm or a member of an AOP, then interest held in the assets of a firm or AOP needs to be disclosed with the PAN of the entity
Assets needs to be disclosed at cost. that includes any cost of improvement incurred on the asset.
Non-residents and not ordinarily resident individuals must provide details of their assets situated in India.
If the asset have been received as a gift or through will, or under any other mode as provided in Section 49(1), the cost of such asset must be declared as per the cost provided by the previous owner plus the cost of any improvement incurred by the previous owner. If the cost of such asset is not ascertainable and no wealth tax return was filed for that asset, the value can be estimated at the circle rate or bullion rate as per the date of acquisition by the assessee.
Liabilities
As for reporting the liability in respect of such immovable property, disclose the amount of loan taken for acquiring such property as well as any money borrowed against the security of such property.As such all liabilities incurred in relation to the assets furnished in Schedule AL should be reported viz:
• Housing loan
• Vehicle loan
• Personal loan
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